The Beecroft report has finally been published, both in its original form, as leaked to the Telegraph, and in its final official form. (Hat Tip to Signal for the links.) And what an anti-climax it is! Sure, many managers will read it and find things that they agree with. After all, most of us have our employment law pet-hates. Some will applaud the proposed cap on compensation for loss of earnings in discrimination cases, others will cheer the suggestion that TUPE protection of terms and conditions should only last for a year. The report contains all sorts of interesting ideas, though I’m not sure how workable some of them are. Doubtless someone better qualified than I am will give it a proper line-by-line fisking in due course.
But, while there are plenty of suggestions in the report, it is short on data. Beecroft provides no solid evidence to show that, even if the report were to be implemented in full, it would make any difference to Britain’s flatlining economy.
I’ve done it to death on this blog but, to recap:
- The UK has one of the lowest levels of employment regulation in the developed world;
- A lot of countries with higher levels of employment regulation than the UK have higher growth, better employment rates and are more competitive;
- Where regulation is already low, cutting it further makes very little difference to employment levels and might even make things worse.
The Beecroft report doesn’t attempt to answer any of these objections. It contains no data at all. As Conservative MP John Redwood found, when he asked his question in Parliament yesterday, the government hasn’t even a rough idea of the likely impact of the report’s implementation.
Mr Redwood, usually thought of as one of the more right-wing MPs, doesn’t think it will make much difference:
I asked how much extra GDP we might get from the full Beecroft. The government said it did not know. I suspect it would be mildly positive, but it is unlikely to be the game changer that tips us into fast growth on its own.
Even “mildly positive” is probably an over-estimate, based more on faith than any empirical evidence.
The OECD has concluded:
There appears to be little or no association between employment protection legislation strictness and overall unemployment.
Even the government’s own call for evidence on the likely impact on micro-businesses is inconclusive. The advocates of further labour market deregulation have, so far, failed to come up with any justification for scrapping existing laws.
Really, the Beecroft report is simply a list of all the employment laws that Adrian Beecroft and the people he talked to don’t like. Nothing more. It’s classic Politics of I Met A Man – long on opinion and anecdote, short on data and analysis. My mates and I reckon all this stuff is a load of crap and we know because we’re business celebs. There’s more of the same in his Telegraph interview today.
Much as the pet-hates and gripes of a few business people might make interesting reading, it is no basis for making policy. Whatever the level of regulation, business people always moan about red tape. Even if the government implemented every measure in Adrian Beecroft’s report, the regulation-haters would still be whinging and the economy would still be screwed.
As you might expect from what is actually little more than a polemic, the Beecroft Report contains a few amusing quotes. This one, for example:
The downside of the proposal is that some people would be dismissed simply because their employer did not like them. While this is sad I believe it is a price worth paying for all the benefits that would result from the change.
All what benefits? Before I decide whether or not a price is worth paying I like to know what I’m going to get. I looked inside Dr Beecroft’s medicine chest and I didn’t find much more than a few quack remedies.